Blu Thorn fights tooth and nail to remain afloat
Creditors’ meeting on liquidation continues High Court reserved urgent application for stay of execution from liquidation
Gaborone high court Judge, Itumeleng Segopolo has reserved judgement to 15th July 2021 in an application for leave to stay out of execution from liquidation by Blu Thorn Fund Management Pty Limited ( BFM).
This is the company that has been accused of siphoning over P200 million from district administrations.
The move by BFM to approach court was one of their many attempts calculated at stopping a scheduled creditors meeting on liquidation which was set for yesterday ( Thursday) 24th June at the high court Registrar and Master‘ s office.
According to lawyers representing clients - Council, Several District Councils, Land Boards and wealthy individuals throughout the country - these invested their money with BFM, but had a rude wakening as nothing came out of the company which moved swiftly, diverting from its mandate without the regulator’s permission.
Records show that 60 percent of the shareholding of the company is Bluthorn Holdings ( Pty) Ltd, the sole owners of the company are Eune Engelbrecht, and Jeffrey Sibisibi having resigned from the company as director and shareholder on 20 February 2020. The same company BFM is now owned by Kelebogile Kelly Sibisibi. Among other resolutions expected to come out of this meeting, BFM who are already placed in liquidation must be investigated on what they have done with the money as well as determine what can be salvaged out of the district money which was given as an investment in order for respective Councils to generate funding.
What has come out clearly is that the public may never recover its money as BFM has already failed to return it at a time when it was directed to do so by the numerous district councils who had invested their money collectively amounting to P211 million with the company. BFM was placed under liquidation by Justice Gabriel Komboni on 19 February 2021 after it failed to adhere to the terms of their business license after a complaint laid against them by NBFIRA.
According to court records, BFM was licensed to carry out the business of Collective Investment Undertaking ( CIU), however; they failed to adhere to the terms of business. This led to NBFIRA appointing Peter Collins as statutory manager for BFM. The decision was influenced by an inspection conducted on BFM where many issues were raised relating to non- compliance with the license.
Having failed to appeal the Komboni judgement which placed them under liquidation within the stipulated time frame of six weeks, BFM tried its luck on two fronts. Firstly, realising that they were out of time in appealing for the decision, they applied to the Court of Appeal ( CoA) for leave to file their appeal out of time. The application is still pending at the CoA. But, because there is no stay of execution of that judgment, it means the liquidation proceedings continue. BFM then went for the second attempt and filed an urgent application before Justice Segopolo to stay the liquidation process before the High Court Master. On Tuesday the application saw the court being filled by different teams of defense attorneys from different chambers representing their clients mainly district councils against one Law Company appearing for BFM. Following what they had stated in their Heads of Arguments, the BFM attorneys were praying for an interdiction from Justice Segopolo for stay of execution from the liquidation process pending an appeal they filed with the CoA. However, one of the arguments raised by the defense lawyers is that “there is no appeal pending before the CoA, but instead, BFM have applied for leave to file their application out of time”. The defense attorneys argue that, the court can only entertain such a move, and further there can only be an appeal if the CoA allows them to appeal out of time. One of the supporting documents written by the current liquidator, Nigel Dixon- Warren and prepared for the Thursday creditors’ liquidation meeting distributed among the creditors under ‘ Offences under the Companies and CIU Act’ reads in part “Based on the work done to date by the Statutory Manager, Bray and the Provisional Liquidator there is evidence that the directors of Blu Thorn committed offences”. In terms of both of these acts those found guilty of offences may be liable to a fine or penalty. They also may be disqualified to act as a director and made personally liable for the debts of the company. The final liquidator will need to determine if such action should be taken. Given the state of the cash position at the date of closure of the business ( 13th February 2020) and the way in which the company was operated the directors have behaved at the very least recklessly and have failed to keep proper books and records. Both are in contravention of the Company’s Act.
It states that failure of Blu Thorn represents a significant corporate failure in Botswana and involves the loss of significant public and private funds of investors.
Based on the work performed to date by the Statutory Manager and Provisional Liquidators, “the matter is complex and requires the final liquidator to perform significant work to recover further information and records and to analyse same to determine whether further recoveries can be made on behalf of the creditors”, the Liquidator’s note says.